Tuesday, Oct 21, 2014

RBI to infuse more liquidity into system

ENS Economic Bureau | Mumbai | Posted: March 21, 2014 2:54 am

The Reserve Bank of India (RBI) has decided to infuse liquidity for an amount of about Rs 40,000 crore through a 14-day term repo variable rate auction to boost liquidity in the banking system. 

The auction is “to facilitate smooth and non-disruptive conduct of banking operations during the annual closing of accounts for the financial year 2013-14”, the RBI said. The reversal of the 14-day term repo will take place on April 4.

Further, the RBI has also decided to conduct a 5-day term repo variable rate auction for a notified amount of Rs 20,000 crore on March 28 with reversal on April 2.

“As a one-time measure, standalone primary dealers will be allowed to participate in the auction to be conducted on March 28 within the notified amount of Rs 20,000 crore,” RBI said. The banking system comes under pressure during the year-end due to tax payments.

The RBI has also decided to offer funds to the banks through the Marginal Standing Facility on March 31 with reversal on April 2. “The MSF window will remain open between 5.00 and 5.30 pm on March 31,” said RBI.

Besides, the central bank also announced repurchase auction of government securities up to Rs 5,000 crore. The announcement was made for seven securities.

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